Port shipments of 100 Gbit/s Ethernet nearly tripled in the first three quarters of 2012 compared to the same period last year as service providers continue to adopt the technology. Shipments are on track to generate $500 million in sales this year and are expected to double again in 2013, according to our estimates. Continued traffic growth and the deployment of 100-Gbit routers are driving the trend.

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In other optical networking markets, Wavelength Division Multiplexing (WDM) peaked in 2000 at $7.7 billion, but 2012 is expected to edge up to $8 billion. The growth—though small—comes in stark contrast to the trough seen in 2003 of $1.8 billion. The good news is today’s increased fiber speed yields eight times the bandwidth for the same dollars compared to what was purchased in 2000.

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Most of the WDM expansion this year came from service providers rolling out 40 and 100 dense WDM to meet the rising traffic requirements. WDM growth is expected to continue at a rate of eight percent in 2013, with over half of the revenue coming from 40- and 100-Gbit links.